LONDON (ShareCast) - (Sharecast News) - Keywords Studios has agreed to buy g-Net Media, a Los Angeles-based provider of marketing services to the video games and entertainment industries, for up to $32m.
It said on Wednesday that the acquisition will further its strategy to become the 'go to' technical and creative services platform for the global video games industry.

Founded in 2001, gnet provides creative and strategic marketing services for leading games publishers including Activision, Microsoft, Bethesda and Bungie as well for media and entertainment companies such as Netflix, Amazon Prime, and NBC Universal.

For the year ended 31 May 2020, the business generated unaudited net revenues of $16.3m and adjusted earnings before interest, tax, depreciation and amortisation of $2.2m. For for the calendar year to the end of December 2021, revenues are expected to be around $20m and EBITDA around $3.0m .

Keywords chief executive officer Andrew Day said: "This represents a significant milestone as we continue to build our marketing service business to become the first truly global, video game specialised marketing services company.

"With its well established position as a valued partner to some of the biggest names in video games, and from its home in Hollywood, gnet brings the number of Keywords specialist marketing studios to seven. Combined, Keywords' annual marketing services revenues are now over €35m with more than 180 people employed globally."

Broker Shore Capital said the acquisition is consistent with the growth strategy set out by management earlier this year and should help strengthen a key division for the group and open more cross-selling opportunities.

"Given that December is typically a light month for marketing services, we do not expect this morning's news to impact the FY20F adjusted profit before tax of €52m announced yesterday. We remain positive on the outlook for Keywords and see 19% upside on the current share price to our fair value of 2580p, therefore, retain our 'buy' recommendation."

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